On Monday, November 12, the ISET Policy Institute hosted a workshop entitled “Economic Instruments for Water Resource Management”. The Energy and Environment Policy Research Center at the ISET Policy Institute (EEPRC) presented its policy paper on the topic in front of several institutional stakeholders and interested citizens.

Thanks to the support of the Europe Foundation, the EEPRC conducted an extensive review of the literature on economic instruments for water management, all of which are in compliance with the principles highlighted by the EU Water Framework Directive, and a study of their feasibility in the Georgian context. The aim of this project was to support Georgia’s path towards integration in the European Union and the implementation of its obligations under the Association Agreement, as well as to contribute to the sustainable management of water resources in Georgia.All major economic instruments potentially useful to incentivize the sustainable use of water resources in Georgia were discussed, highlighting the feasibility of alternative policy options.

According to the analysis, given the current legal framework and the feasibility of different economic instruments, after the introduction of a new law on water resource management it will be vital to review abstraction charges for surface and underground water bodies and to implement a transparent methodology for the valuation of water and the calculation of water abstraction charges. Introducing water pollution charges will be even more challenging, as there is currently neither any legal framework nor past experiences of administering such charges in the country. A transparent methodology and a significant amount of data on effluents and polluting industries are deemed to be essential to implement this instrument effectively and efficiently.

Besides the implementation of different economic instruments, cooperation among agencies regulating surface and underground water use will be crucial. The National Agency of Mines and the Ministry of Environment Protection and Agriculture will have to cooperate within the newly-introduced basin management planning framework to establish the above-mentioned economic instruments in a way that does not incentivize the overconsumption of water sources.

The presentation was followed by a discussion, during which stakeholders and members of the public provided their feedback, contributing to the formulation of the final recommendations on the topic.